Nathan Hohnstein

Expanding E15 (15% corn fuel) can increase demand for corn and require costly infrastructure upgrades -- factors that contribute to higher gas prices. More mandates. More cost at the pump.

Why hasn't E15 infrastructure been installed more where it is legal today? 1. Nonsense. Start with their graphic. It is not legal in every state at every station listed. Look to Texas, it is not 16,017 stations, that is the entire state. It is only legal in RFG markets there. The real number is less than 7,000. Or California, you still cannot sell E15 in the state, so why mislead? 2. Scare tactics. Anyone in the business knows it doesn't cost $375,000 to $425,000 per site to add E15. Most stations built within the last 20 years have compatible tanks and dispensers. The first station that added E15 in July 2012 simply had to add labeling. 3. Branding agreements. Brands control what fuel you can sell and then typically how you can market and price it. Even IF they allow you to sell higher blends like E15 and E85, they can just price it out of the market, ensure you sell nothing. They may also force you to add additional labeling, this is not a ___ product, we cannot guarantee its quality. Another scare tactic. 4. Supply agreements. You don't fly the flag but still need their fuel. They block the option at the fuel terminal. Thirteen years later, there are lots of fuel terminals, and suppliers even within terminals, that don't offer E15, that don't allow their retailers access. IF they do allow access and for you to sell it, you are oftentimes penalized for success if you don't meet your contracted supplier gallons disincentivizing you yet again from offering and selling E15. Doesn't make sense? Imagine you said you would buy a million gallons of unleaded. If they say you can sell E15, they likely won't let those gallons count towards the million. If you sell 20% of your volume as E15, and reduce your overall gallons, you are not meeting your contractual gallons because they don't count. 5. Feedstock availlability. Refiners are still not offering a lower octane BOB, which could be as low as 82.5 to achieve 87 octane with 15% ethanol. This would lower the cost of the gallon to the retailer and consumer. Without it, it is artificially inflating the price of E15 for retailers above where it could be today. At the end of the day, the ability to offer E15 year-round across the nation changes most of this overnight. It provides retailers the certainty they need to make whatever investment is needed, which depends heavily based on each station. Just like E10, once the regulatory hurdles are removed, the market will move and some of the above gets fixed naturally. It doesn't fix all, but it is the biggest hurdle today.